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Middle East/Africa Economic Terms from the th 7 grade standards Take notes! Quiz to come! Distribution Economy A distribution economy is dependent completely upon one resource for their finances (AKA specialization) An example of a distribution economy is any Middle Eastern country that relies upon oil production Market Economy A country which practices free enterprise with no government involvement An example of a market economy could be a small scale community or village that uses bazaars and bartering Mixed Economy An economic system in which some businesses are government run and some are free enterprise. The U.S. is an example of a mixed economy Voluntary Trade Voluntarily purchasing something where both groups are financially or mutually benefited One group volunteers to sell it, another volunteers to buy it Ex: Persian Rugs in Iran, Apricots in Turkey Import Goods brought into one country from another through trade or sale We import oil from the Middle East Export Goods and services traded with or sold to other countries Saudi Arabia exports oil to the rest of the world GDP Total value of all goods and services produced in a country in a given time period Example: In 2007, Jordan calculated the value of its goods and services at 16.01 billion dollars. Trade Barriers Any law or practice that a government uses to limit free trade between countries…it could be a political or military obstacle to trade Examples: chokepoints, military blockades, Iranian sanctions, Israel and the Muslim World Currency Something in movement as a standard of trade (usually the money used for trade) Exchange To give something away and get something back as a substitute (the process of trade) Human Capital This is knowledge and skills that allow workers to produce goods and services and earn an income. Example: A company that invests in training for its workers. Traditional Economy Subsistence-level (survival, agriculturalbased) economy Example: much of Sub-Saharan Africa… any country or community where food is raised for survival rather than INCOME Commodity A valuable or useful economic good Example: oil is a commodity for the countries bordering the Persian Gulf in the Middle East along with minerals mined in North Africa Entrepreneur Someone who organizes, manages, and assumes business risks Ismail Pasha (Suez Canal) is an example Command Economy An economic system in which the government decides what goods will be produced, how they will be produced, and how they will be distributed The strict Islamic law present in Saudi Arabia borders on a command economy, but true examples include North Korea and Cuba OPEC The Organization of Petroleum Exporting Countries works to set a fair price for oil traded throughout the world. Supply & Demand When you have a lot of something the price goes down and when you have little of it the price goes up! Example: When Iraq invaded Kuwait and began destroying their oil pipelines, the price of oil went up because the supply was lower but the demand remained high.